ancial performance so as to increase their efficiency and/or prepare for privatization. Public debt management Due to the high levels of public debt and its effects on the budget, the government is to adopt a debt management policy to reduce the debt and debt-service ratios. Banking sector The banking reform program has already started to stem the losses from the politically motivated lending and subsequent operating losses. The efficiency of the banking sector has been improved through a change in management and by reducing overstaffing and the excessive numbers of branches. Regulations and financial disclosure standards have been brought to international levels to increase transparency. The central bank’s autonomy, especially in monetary policy and banking supervision, has also been strengthened through the amendment of the law. This is to lead to the privatization of the rest of the government controlled banks over the next two years.Reform in the Foreign exchange market Pakistan is to increase the role of market forces in the process of determining the exchange rate by developing the spot and forward markets, and by eventually having a freely floating exchange rate. Tariff reform Plans have been made to remove the remaining restrictions on exports and imports and to further lower import tariffs. The elimination of import bans on textile products is expected to be agreed upon during negotiations between Pakistan and its main trading partners. Only tariffs applying to automobile imports will remain for balance of payments reasons. Tax reform The focus of the tax reform program is to achieve larger revenues from tax collection, while promoting a more equitable distribution of the tax burden and greater documentation of the economy. To achieve this, the tax base is to be broadened by including previously untaxed income and under taxed sectors, and tax administration improved in order to provide scope for a lowering of statutory t...
